Study Reveals: Rio 2016 is Set to Incur $1.6 Billion Cost

The Rio Games are on track to incur a cost overun of USD 1.6 billion, or 51% in real terms out of total sports-related costs of $4.6 billion, according to a new study from Oxford University’s Saïd Business School.

‘The billion-dollar-plus cost overrun on the Rio Games comes at a time when Brazil can ill afford it, given that it’s facing its worst economic and political crisis since the 1930s and the state of Rio de Janeiro is particularly hard hit by recession,’ said Professor Bent Flyvbjerg, lead researcher of the study. ‘But Brazil is not a unique case. All summer and winter Games that we’ve studied have shown cost overruns. For a city and country to host the Games is a huge undertaking and one of the most costly and financially risky mega- projects they can undertake.’

‘All Games come in over budget,’ comments Professor Flyvbjerg (photo). ‘If you wanted to make it as difficult as possible to deliver a megaproject on budget, you would do exactly what they do at the Games. You would assemble a team that has never delivered this type of project before, in a location that has never seen such a project. Then you would enforce a non-transparent and highly questionable bid process that encourages overbidding and places no responsibility for costs with the entity that decides who wins the bid. That unfortunately is the reality we see with the Games.’

The study advises host nations, cities, and the IOC to get as realistic a picture as possible of costs and risks. ‘The Olympics Games are unique in their complexity and huge expense and we need to try and avoid situations such as Athens 2004, which contributed to Greece’s economic problems and is still being played out a decade later. Our hope is that this study will help potential host cities and nations in their planning,’ said Professor Flyvbjerg.